Consumer Credit Balances Expand

Soccer legend Pele (L)
gestures in front of a huge credit card held by Geoff Bruce, head
of Cards Asia Pacific of Hongkong Bank, during the launching
ceremony of a World Cup MasterCard card, February 24,
1998.REUTERS

Consumer credit balances increased by $19.6 billion in May. This
is according to the Federal Reserve's monthly G.19 report.

This compares to the $26.1 billion increase in April.

Economists were expecting balances to increase by $19.6 billion.

Revolving debt, which includes things like credit cards, inceased
by $1.79 billion.

Non-revolving debt, which includes car loans and student loans,
climbed by $17.8 billion.

"In our view, most of the rise in nonrevolving credit can be
attributed to growth in federal student loan programs; according
to the Federal Reserve, total student loan debt outstanding has
risen by over $400bn since the start of 2010, and federal loans
currently make up roughly 85% of the total," said Barclays'
Cooper Howes. "We expect the trend of strong growth in
nonrevolving credit and tepid increases in revolving credit to
persist."